These criticisms make Islamic economists call for economic development to be based on more humanitarian rules. Contrary to "economist", "Islamic economist" advocates obtaining benefits under the restriction of religious principles inspired by Allah and the supervision of society. According to the Islamic zakat system, 2.5% of the balance must be paid after one year when the balance after living expenses has reached the amount of zakat. In addition, the agricultural tax also includes eleven taxes (rain irrigation) and 1/20 (manual irrigation). Zakat in animal husbandry is different. This makes all property owners responsible for the welfare of the poor in a predictable form. In many countries (including Egypt, West Bank and Gaza), Islamic welfare organizations have replaced the original welfare forms and provided effective medical security, education and social services for the poor. The zakat system in Islam and some regulations on inheritance (requiring the wife to get half of her husband's inheritance and prohibiting the eldest son from inheriting) have solved the problem of redistribution of property income. Through these rules, it is difficult to concentrate wealth in the hands of a few people.
As we all know, all Muslims are brothers. In the eyes of Muslims, a person with wealth, power and knowledge is not necessarily superior, because piety and kindness to the Lord are more important to Allah. Therefore, the relationship between people should be equal, and should not be a relationship of mutual fraud and exploitation. Although the relationship between employers and employees is employment and being employed, as Muslim brothers, there is naturally friendship and respect between them, thus cultivating a harmonious working environment and setting a good example for society. Islamic companies can implement dividend system to narrow the income gap, give employees more reasonable remuneration, adopt interest-free banks and risk-sharing systems to reduce exploitation, increase workers' income and further narrow the income gap between labor and capital.
Research objects and methods:
We chose Egypt because it has the largest and most diversified economic system in the Islamic world, including private industries and developed Islamic economic sectors. We met the bosses and managers of non-financial companies from 1993 to 1994. Within a year, the researchers established contact networks with these sample companies. Some additional information was collected during my visit to industrial centers and farms near Cairo.
The companies surveyed are divided into two categories according to the source of funds: Islamic and non-Islamic. The two groups are paired according to industry types, namely: plastic manufacturing, automobile manufacturing, textile industry, meat and poultry processing industry, publishing and printing industry, food tourism industry, daily necessities manufacturing industry and carpet manufacturing industry, and an unpaired daily-use plastic products manufacturing company. We compared the information we got.
Comparison results:
(1) Financing method and profit distribution:
First of all, the importance of personal financing to the two companies is the same. The difference between the two is that Islamic companies do not have interest-bearing loans. On the contrary, non-Islamic companies have interest-bearing loans. Islamic companies are closely related to Islamic banks or stock trading and investment companies. This enables Islamic companies to obtain technical advice, market information and financial support from banks. However, it also gives banks the right to intervene in corporate management.
It should be pointed out that the investment of Islamic banks in Islamic companies is risk-sharing, while the interest-bearing banks in the west do not regard risk as capital. Interest-bearing banks are maintained and developed by interest. Islamic banks survive and develop by sharing company profits.
(2) Assets and profits:
Non-Islamic companies have more fixed assets than their Islamic counterparts. The average fixed assets of six non-Islamic companies are about four times that of Islamic companies. However, five non-Islamic companies have obvious debts, and the debt ratio of the automobile industry is as high as 90%.
The profit rate of non-Islamic companies greatly exceeds that of Islamic companies. The average profit rate of Islamic companies is 18.0%. The profit rate of six non-Islamic companies is 52.3% (profit rate = profit/fixed assets at the end of the year).
(3) Behavior comparison:
From the perspective of product production, company location and date of establishment, foreign capital plays a great role in non-Islamic companies, while Islamic banks and investment groups play a greater role in Islamic companies.
Non-Islamic companies export 6/8 products. Islamic companies export 4/7 of their products. It can be seen that non-Islamic companies are more inclined to export their products. This is also related to the attitude of two types of companies towards liberalization. Most non-Islamic companies expect to benefit from it, while Islamic companies are more negative about it.
Now, informatization is very important for all companies. Non-Islamic companies generally have more preparation and innovation plans, while Islamic companies have less actions.
Employment conditions, such as academic qualifications and skills, mainly depend on the type of company, which is relatively consistent among companies. The proportion of female employees has changed greatly. All non-Islamic companies employ some women, while four Islamic companies have a policy of not hiring women (two are absolutely prohibited and two are prohibited in principle).
(4) Distribution of wages and profits:
There is a difference in wages between these two types of companies. Islamic companies pay more. The wage difference of non-Islamic companies is quite large (the high-low income ratio is 53: 1). Islamic companies are smaller (27: 1). The ratio of profit to wages can reflect the distribution of net added value of production between employers and employees. The lower the ratio, the more uniform the distribution. In fact, the ratio of Islamic companies is lower than that of non-Islamic companies. As can be seen from the above, the profit distribution of Islamic companies is more even. In terms of welfare, there is little difference between the two types of companies. One difference is that one in seven non-Islamic companies only pay dividends to their employees, while four in six Islamic companies pay dividends. 1994, Egypt still stipulates that "joint-stock private companies" must pay dividends if they have more than 50 employees. Many non-Islamic companies call themselves "partnership companies" and do not need to pay dividends, although they have more than 50 employees and are often larger. It seems that more Islamic companies are willing to classify themselves as "joint-stock companies", although they know that it means paying dividends to employees. This is probably related to the source of the company (Islamic banks and investment groups or capital investment such as the United States).
Conclusion:
Islamic companies and non-Islamic companies have many important characteristics in common. All companies are driven by market competition and are worried that liberalization will bring more external shocks. They all hope to work with other companies in the same industry to set prices and output in order to get more benefits. They also have an emotional style towards employees.
There are obvious differences in fixed assets and profit rate between the two types of companies. The following are some possible reasons: (1) The positive effect of fixed assets on profits is the scale effect. (2) The advantages of early establishment of non-Islamic companies and the inheritance of companies in the pre-Nasser period. (3) Due to the risk of venture capital, Islamic banks and investment companies have not invested enough in establishing the capital base and profit potential of Islamic companies. (4) Generally speaking, non-Islamic companies are more efficient, probably because they are more inclined to innovate and export.
Both Islamic companies and non-Islamic companies claim to be fulfilling their social responsibilities, which limits the maximization of profits. These duties include: facilitating employees' personal loans, attending employees' family weddings and funerals. An Islamic clothing company once paid the wages of unemployed employees while waiting for equipment replacement after burning.
On the other hand, Islamic companies as a whole pay higher wages, pay more fairly and better balance the distribution of profits and wages. They are also more willing to pay dividends to employees. But only the president of an Islamic company made it clear that for the Islamic economy, the fairness of distribution is implemented by the wage system, and the price and output are determined by social needs. Because no company has ever noticed the differences between the two types of companies in profit margin, salary and the ratio of profit margin to salary, the universality of this difference is still uncertain.
The different behaviors and operations of the two types of companies may reflect the differences in internal or decision-making mechanisms. Although there are some similarities, the economic operating environment of Islamic companies and non-Islamic companies is different. In their respective environments, they receive corresponding support and rewards. From this, we draw an important enlightenment: it is not the market that works alone, but also the social morality and customs around economic behavior.
So, how can the Islamic economic sector improve productivity and increase employment? In fact, if the Islamic companies in this study are representative, then Islam sets a good example for how to distribute the net profit fairly. For example, higher salary and dividend system, more intimate and humanized employee treatment. However, Islamic companies must actively seek technological innovation and improve their competitiveness in order to maintain their further development. Otherwise, the company's survival will become more and more difficult.
Of course, the process of innovation and productivity improvement is not simply profit maximization, but a necessary factor to accumulate funds for new investment and create new employment opportunities. However, we have no reason to sacrifice fairness for efficiency. Part of employee dividends can be invested in the company's production investment on a voluntary basis to support production and give play to the scale effect of the economy. In this way, employees, employers and banks all participate in new investments, thus creating more employment opportunities and more returns brought by long-term development. In this case, the prospects of young workers in the Islamic economy will be brighter.